The legislation would establish a state bank, effective July 2019. The bank would accept a portion of state funds that are currently held in out-of-state bank accounts, and manage many of the state's financial assets and obligations, including bonds and loans. Income from financial products would be deposited into the state's rainy day fund.

"Private banks exist to serve the interest of shareholders who often prioritize short-term profits. There's nothing wrong with that, and most of them do a fine job of it," Miramant said in a release issued by the Senate Democratic Office. "A state bank, instead, exists to serve the people of Maine. Because of that, it can offer lower costs and more favorable terms for investments that benefit our state."

Modeled after North Dakota

Miramant submitted the bill after a similar piece of legislation caught his interest last year. He then began researching this proposal, which included reading a book by one of his own constituents, economist Randall Parr.

"After about a year of digging into this issue, I've yet to find any compelling reason not to move ahead with the creation of a state bank in Maine," said Miramant.

The proposal is modeled on North Dakota's publicly owned state bank. The Bank of North Dakota has been a consistent success, and offers some of the lowest interest rates in the country for student loans, according to the Senate Democratic Office. It returned $300 million into the state's coffers between the years 2000 and 2010. Partly as a result, North Dakota was the only state to run a budget surplus in the recession.

LD 237 faces further action in the Insurance and Financial Affairs Committee, and votes in the House and Senate.